Annual Report 2013
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The Oval, An Oval, 160 Shelbourne Road, 160 Bóthar Shíol Bhroin, Ballsbridge, Droichead na Dothra, Dublin 4. Baile Átha Cliath 4. Tel + 353 (0)1 677 1700 Fax + 353 (0)1 661 5375 [email protected] www.eirgrid.com Group Structure plc * ** Interconnector UK Holdings Telecoms Limited Limited Limited Tynagh Power Station, Co. Galway. * SONI is a 100% subsidiary of EirGrid UK Holdings Limited ** SEMO is a joint venture between EirGrid plc and SONI Limited EIRGRID PLC ANNUAL REPORT & ACCOUNTS 2013 EirGrid Group is the licensed electricity Transmission System Operator and Market Operator in Ireland and Northern Ireland and owns and operates the East West Interconnector between Ireland and Great Britain. Our Mission To provide quality, efficient, independent transmission and market services for the benefit of everyone across the island of Ireland. Contents Chairperson’s Report 2 Chief Executive’s Review 5 Our Strategy 10 Financial Review 12 Operating the Power System 16 Operating the Single Electricity Market 22 Operating the East West Interconnector 24 Transmission System Map 26 Developing Transmission Infrastructure 30 Europe 37 Our Customers 38 Corporate Social Responsibility 44 The Board 50 Organisational Structure 56 Executive Team 58 Financial Statements 61 1 EIRGRID PLC ANNUAL REPORT & ACCOUNTS 2013 Chairperson’s Report I am pleased to present EirGrid’s reliable supply of electricity at a Annual Report for the 12-month period competitive price. No region should to 30 September 2013. It has been have its potential limited by lack of a significant year for the EirGrid Group a good power supply. The benefits of with the major milestone of the 500 MW renewable energy must be harnessed. HVDC East West Interconnector entering All this requires major strengthening into commercial operation. It has also of the transmission grid in both been a year of transition for the Group jurisdictions. with Fintan Slye taking up position The major grid development projects as Chief Executive and a new Strategy proposed by EirGrid have provoked being developed setting the way forward a strong public reaction and raised for the next five years. a number of legitimate questions This Annual Report presents the which will be addressed. As a company operations of the EirGrid Group owned by the people it is our desire to for Enterprise, Trade and Investment in comprising system operation and market develop the ‘right’ electricity network Northern Ireland, Arlene Foster MLA, and operation across the island, operation which utilises the best technology her officials for their support. of the East West Interconnector and and most up-to-date information and Finally I would like to say that development of grid infrastructure in which strikes the best possible balance I am pleased to take up the role of Ireland. It also includes our approach to between costs and competitiveness, Chairperson of the Board of EirGrid and Corporate Social Responsibility and to on the one hand, and the impacts on look forward to working with fellow our customers and stakeholders. the environment and heritage, on the directors and the management and staff The achievements during the year are a other. We are committed to consulting of the company in Dublin and Belfast for result of the capabilities and dedication meaningfully with communities and the good of the people on the island of of the Group’s staff and management, for other stakeholders in this process. We Ireland. which I thank them. want our dealings with communities The profit before tax of €61.1m for the and concerned individuals to be open, year to 30 September 2013 compares honest and professional. We want to to a profit before tax of €20.8m for learn from experience as we continue the year to 30 September 2012. The our work. We fully appreciate the John O’Connor CHAIRPERSON East West Interconnector became fully importance of public trust and commercially operational in May 2013 confidence to the successful delivery of and contributed €34.0m in profits our mandate. before tax. This included profits of I would like to express my thanks to € 25m due to a timing difference my predecessor Bernie Gray for her between tariff support commencing on stewardship of the Board and the 1 October and the go-live date of May. company during her term of office. These higher profits will be returned to I also want to express my gratitude to customers in future tariff periods. An the Board members for their commitment interim dividend of e4m is provided for and service as Directors during the year. in the financial statements and this was I would like to extend my appreciation paid to the Exchequer in November 2013. to Minister for Communications, Energy EirGrid Group bears a heavy and Natural Resources, Pat Rabbitte responsibility for ensuring that people, TD, and his officials and staff for their communities and businesses throughout support for EirGrid plc. I would also the island of Ireland have a safe and like to extend my gratitude to Minister 2 East West Interconnector Converter Station at Woodland, County Meath. 3 4 EIRGRID PLC ANNUAL REPORT & ACCOUNTS 2013 Chief Executive’s Review I am pleased to present the Chief Profit before tax for the year was Executive’s Review for my first year as €61.1m, an increase of €40.3m on Chief Executive of the EirGrid Group. the previous year, of which €34.0m is related to EWIC. The trading During the year we again delivered on performance was substantially impacted our core remit in the areas of system by the timing of the interconnector operation and wholesale electricity achieving full operational status. market operation. These services are Adjusting for this affect, estimated critically important for our customers underlying profitability for the Group for and stakeholders and strategically the year was €18.3m and all regulatory important for the island of Ireland. over-recoveries will be returned to The East West Interconnector (EWIC) customers in future tariff periods. went into commercial operation. It is Chief Executive Fintan Slye. leading to increased competition in Grid Development the Single Electricity Market and this Part of EirGrid’s core remit under is resulting in downward pressure on legislation is to ‘ensure the development wholesale electricity prices. Wholesale of a safe, secure, reliable, economical prices decreased by 8% over the first 6 and efficient’ grid. The aim of the Grid25 months of its operation. Strategy is to fulfil this remit and put Internally we restructured the appropriate cost-effective electricity organisation to operate as an all-island infrastructure in place to enable Ireland Group as part of our efforts to improve to have the electricity transmission our efficiency and effectiveness. We infrastructure needed to support the also developed a new Strategy to set economy and society into the future. the direction for the Group over the Three major infrastructure projects next five years and new Values for the - Grid West, Grid Link and the North- way we behave as an organisation. Our South project - have been in the public new Strategy and examples of living the consultation phase. We engaged in Values are presented throughout this extensive programmes of consultation Annual Report. including a series of open days across the country. We acknowledge the strong Last year there was extensive public public concerns in relation to the consultation on three major infrastructure infrastructure development. Over the projects. There was strong public reaction coming months we will be examining and to the consultations with over 35,000 responding to the feedback received. submissions received on the Grid Link We have announced a series of Project. We are committed to responding initiatives to address the key themes in a meaningful way to the issues raised in raised and are committed to the consultations and we have announced implementing them. a series of initiatives to address the key themes raised. The TSO Certification process for Ireland and Northern Ireland to implement European Directive 2009/72/ Financial Results EC concluded. As a result the System The successful completion of EWIC in Operator in Northern Ireland will be 2013 was a major milestone for the taking on the transmission planning Group. The final cost of the project was role in Northern Ireland, making the €562m compared to the original project responsibilities of the System Operator budget of €601m. more similar in both jurisdictions. 5 EIRGRID PLC ANNUAL REPORT & ACCOUNTS 2013 Innovation – Renewables Our Customers and Stakeholders and Smart Grids As an organisation, delivering for our Progress continued on the DS3 customers is very important to us and it programme – our overarching project to is our ambition to continually improve enable secure operation of the power our performance in this area. We are also system in real time with increasing committed to working constructively with amounts of variable renewable all of our stakeholders, our shareholders generation. During the year the new and the regulatory authorities. The system service products were developed importance of these relationships is and the technical changes to the Grid prominent in our new Strategy. Code on Rate Of Change Of Frequency We engage in significant stakeholder (ROCOF) were set out. Engineers Ireland Excellence consultation on our major projects. Award presented to the EirGrid During 2013 the acceptance phase of The EirGrid Group’s Public Consultation Group for the East West the Gate 3 process went live. There are Roadmap sets out how, and by what Interconnector Project. now adequate connection agreements means, members of the public can in place to enable Ireland’s 2020 participate in the project development renewables targets to be met. process and is aimed at making participation as convenient as possible In the Smart Grids domain, we continued for all parties.